It’s been over six months since City Centre opened, bringing 192 housing units and new business spaces to downtown Ithaca. The project went through a long journey to come to fruition, and now that it’s found its place in the community, its effects on the city and even the county have been mixed and sometimes hard to determine.
City Centre’s journey began back in 2016, when Marc Newman, managing member of Newman Development Group, turned his hopes of urban revitalization in Ithaca into a feasibility study of a large-scale housing project downtown.
“We looked at Ithaca as very vibrant with strong possibilities, and we pursued those possibilities, and the project came to fruition,” Newman said.
After the feasibility study, the design was focused on creating a place that provided more than just housing, Newman said.
“We really put a lot of emphasis on the design and the environment,” he said. “We wanted to create a community. We didn’t want it to be just an apartment.”
The resulting City Centre, an estimated $53-million, eight-story, 218,211-square-foot, mixed-use project, officially opened for businesses and residents last June.
Though Newman said the project received much community support during its development, there was some concern raised by residents, which is why Tompkins Weekly is taking a look at how City Centre has lived up to expectations since opening last year – first, its effects on the environment.
While the project was under review by the city’s Planning and Development Board, some residents spoke against the project, arguing it could impede the city’s energy reduction efforts.
Heather McDaniel, president of Tompkins County Area Development, said that despite the concern, the building was designed to be very energy-efficient. The Industrial Development Agency, for which TCAD provides administrative support, delivered an enhanced energy incentive package to City Centre to allow the developers to significantly reduce energy usage in the building and include more renewable materials.
“There’s a certain set of people that don’t want to see any development or any density, and so, those people will come out and say, ‘I don’t want this,’ ‘I don’t want that,’ ‘We’re never going to meet our energy-reduction goals if we keep building buildings,’” McDaniel said. “The reality is that new buildings are much more energy-efficient than old buildings, even. I think this building is a model of what we could see throughout downtown in the future.”
City Centre is 40% more energy efficient than current building code requires, according to TCAD, which McDaniel said is an improvement over the underutilized property that was in the area previously.
Turning to the effects on housing, since no official study has been completed since its opening, City Centre’s effects on the housing market are hard to pin down precisely, and not all sources agreed on whether the project was a beneficial approach overall for the county’s affordable housing crisis.
City Centre’s apartments appeal to middle- and upper-income residents, with the one-bedroom apartments starting at $1,735 and two-bedrooms starting at $2,840. Newman said the units appeal to professionals, empty-nesters and graduate students.
As of July 1 last year, 90% of units were rented, a number that surprised many. Newman said that percentage can likely be attributed to the amenities City Centre offers as well as the design of its living spaces.
The apartments include stainless steel appliances, quartz countertops, in-unit laundry and large storage spaces, and residents have access to shared amenities like wine storage space, a rooftop terrace, fitness center and common kitchen.
“We really created an environment where people, I think, feel like even though maybe they live in a studio, it seems much larger, and there’s a lot for them to do,” Newman said.
As City Centre doesn’t add new affordable housing units to the market, its effects on the affordable housing crisis in the county are more indirect, as Gary Ferguson, executive director of the Downtown Ithaca Alliance, argued.
“Projects like City Centre help increase the supply of housing, and increasing the supply of housing is inherently good just by itself because it just provides more places for people to live and hopefully softens the demand on the units that are left,” Ferguson said.
As covered in a previous Tompkins Weekly report, the affordable housing crisis was cited as needing multiple strategies to solve, among them being adding housing at all levels to free up affordable units currently being taken up by folks stuck because there’s such a low supply.
Thus, as Ferguson and McDaniel argued, City Centre adding units, despite being “luxury”-level housing, allows some of those stuck people to move out of their current housing and into City Centre, freeing up affordable units for those who need them.
Others argue projects like City Centre have a negative effect on the housing market throughout the county. Dryden Realty Licensed Real Estate Agent Kayla Lane, a member of the Tompkins County Landlord’s Association (LATC), said that overall, City Centre appeals to a different set of residents than most LATC properties, so City Centre doesn’t present direct competition for the association. However, that is not to say that City Centre and projects like it don’t affect county landlords, she said.
With City Centre providing units with significantly more amenities than the typical unit and with future projects like more student housing on the way, tenants are becoming choosier, Lane argued, which puts a strain on county landlords.
“If you ask any landlords that have been in this business for a long time, especially in college town or downtown Ithaca, they would’ve told you how easy it was to re-rent or turnover an apartment and probably have a line of people waiting for it,” Lane said. “But now, I think that landlords that aren’t part of these new developments or these big builds have to make their apartments more appealing and/or lower their rent from what they used to be getting.”
In addition, Lane said landlords could benefit from the sort of tax abatements and incentives that City Centre received. (An IDA tax abatement phases in new property taxes on City Centre over the next 10 years.)
“We might not be able to put the same amount of money into our rentals to upgrade them or make them appealing,” she said. “Landlords could find that it’s become too expensive to own property and decide to take their rentals off the market.”
As debated as City Centre’s effects on housing are, most sources interviewed for this story agree that the project has been largely beneficial for downtown businesses, especially since the project brought in a significant influx of new residents to downtown.
On the ground floor, City Centre is home to businesses like Collegetown Bagels, and the additional residents creates more foot traffic to other surrounding businesses, Newman said.
“I see the restaurants busy,” Newman said. “It feels like a real city down there, hence ‘City Centre.’”
Red’s Place, located just around the corner from City Centre on North Aurora Street, has been in Ithaca for roughly six years, and owner BJ Bliss said he’s seen City Centre have a positive effect on his business.
“As a business owner downtown, we are always excited about new developments that keeps people in the area of the restaurant, whether it be housing or hotels, etc.,” Bliss said. “It has certainly helped bring in business on some of our Monday, Tuesdays and Wednesdays, and I think that will certainly continue as more people continue to occupy the apartments.”
Bliss said the additional housing units ultimately mean more people frequenting his and other nearby establishments.
“Adding housing/hotels of any kind that are steps from local businesses are always a good thing,” he said.
In addition to the effects on housing and business, Ferguson said that with the general success of City Centre, he expects it to affect future developments.
Future projects like it will use it as a model, he said, as it demonstrates the benefits of providing access to public transportation and adding to a thriving downtown community.
“Seeing a project of this size – and this is a big project in anybody’s book – so successfully lease up so quickly, I think, will be inspiring to others,” he said. “What this continues to demonstrate is that there are people who want that type of lifestyle and understand that even though the units might be a little pricey, … they can sometimes do that because they can save money with transportation.”